Shopping for a $1.5M home in California (Silicon Valley)

in this video i'm going to show you what 1.5 million gets you in the bay area we could have been approved for mortgage a lot earlier because we're permanent residents in the us since 2016. but when they look at your mortgage application they look at your tax returns and with tax returns you have two strategies one strategy you try to optimize the business in a way that you don't pay a lot of taxes and by this you're investing in equipment you're hiring more expensive people you're investing in development of your ip etc and i was a fan of this first strategy especially at the stage of our business growth but then you know a couple years ago i was like i really want to buy something in the united states because i see my future here so i had to change my tax strategy to start paying more taxes so i didn't invest that much in the business i was pulling out some money to actually save for a down payment now we were finally approved for mortgage our mortgage is for 1.5 million dollars the rate is 4.5 percent but we got approved for the rate several weeks ago meanwhile the fed raises rates so probably when we find the right house the rate is going to be higher the down payment is 20 so we started looking for a house i am still not sure like we applied for an investment property i'm also thinking maybe we should buy primary because we're renting right now but i'm still like in the middle of deciding because i really like the place that we're renting right now and i was thinking maybe we buy something that could be a good investment property so we could rent it out but that could also be a good home for a family so something that i would also consider moving into a lot of people would say marina but just buy in some other state where you would actually be able to you know have a good cash flow whatever the thing is i don't look at this as purely investment property for me real estate investing is about actually loving the place and loving the neighborhood so i'm still looking at the houses but i just want you to understand my perspective i really want to like the place i know that in silicon valley prices double every 10 years so that makes it okay for me we're looking for something in the bay area just because we really like this place we live here we don't really travel a lot outside and they also tell that your first investment property should be a maximum one-hour drive away from where you live so you could easily go there fix things come back and because you understand the area so it looks like 1.5 would get us something decent here in pacifica which is actually great because you have the ocean here and it's very close san francisco we have a lot of friends who live here we could also look at some places in santa clara we're going to look at mountain view but in general it doesn't really get us a lot but we'll try and see what we can get here so we're in the area to see the house the house is right behind me and on this street there's this rv camp the highway is right there there's the highway 1.5 or less and one result click that um okay [Music] okay if we're completely honest if you drive two minutes away from the house you actually see playgrounds and this really nice area so it's not too bad but the exact location of the home is like [Music] i like that it's all super like all renovated you can just go and rent it out right away if you want to rent it out or you can move in right right away if you want to move it that's nice this is this is for youtube studio right just stay here this is a killer view i think if you're buying in pacifica you have to have a view compared to like right half an hour ago i was at home and i was wearing my t-shirt okay so there is one bathroom for the whole house okay enough for the whole house for the whole floor one bathroom on the second floor and it says three bedroom but i would say it's like a two bedroom because if it's like a lot of people sharing them one bathroom won't be enough oh there's a fireplace yeah this is rare these days because i think they don't love fireplaces and new constructions [Music] so the agent said that this home in pacifica is going to go for 1.6 million honestly i've been looking at how much houses go for in this region and i think it's gonna sell for 1.4 but we'll see you know it's just crazy how you can't really predict uh how much the house is going to sell for but my friends who bought a house in pacifica i think it was like six months ago it was listed for 1.5 and they bought it for 1.59 so a little less than 100 000 over asking price anyways let's pretend that this house goes for whatever they have here on zillow let's just look at the mortgage calculator to see what we'll have to pay so we copy this 1 million we go to the mortgage calculator loan amount 1 million this is our loan amount and then 30 year and i want to include taxes and fees so my credit score is a little over i think it's somewhere here so this is the interest that we're getting and actually i think that it's going to take us a couple months to find the right home and once we find it looking at what's happened with the inflation and everything i think our interest rate is going to be over five my friends got 2.6 or something i really regret not buying a house last year but i couldn't because i was working on my tax situation anyway so it's 1.2 put it here the down payment is 259 000 and this is after a tax by the way so it's 20 and then monthly payment is gonna be 7174 that's including property taxes home insurance etc let's look at the rental income like the thing is here in the bay area it is very rare that you can find something at least this is what my real estate um person tells me is that normally your mortgage payments will be higher than your rental income so zillow says that this house can generate let me see four thousand dollars or four thousand one hundred dollars in rent so obviously if we get this house it's three thousand dollars more that we have to pay in mortgage and this is the way it works here so i was talking to the homeowner who we're renting uh this house from they pay over fifteen thousand dollars in mortgage and we pay them 7 500 a month in rental and he did commercial real estate before so he says in terms of cash flow this is the worst house for him but in terms of home value they got it in 2015 for 2.9 million now it can sell for 4.2 million so they almost doubled their amount in less than what in seven years and i think by 2025 they they will be able to sell it for like 5 million it's just crazy how prices grow here and on average house prices double every 10 years in silicon valley it's just this crazy region with a lot of things happening and a lot of people can say like oh but this is the end of silicon valley everything is remote nobody wants to live here this is not what we're seeing on the market so my real estate manager says the houses go on the market on wednesdays saturday sunday open 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